October 2016 newsletter – Keith Cowling

Keith Cowling was one of Europe’s leading industrial economists and a long standing advocate of industrial policy. He was also renowned for being highly critical of the state of contemporary capitalism, believing that its monopolistic tendencies led to recession and stagnation and was prone to abuse of corporate power. He conducted this critique by uniquely combining both neoclassical and heterodox approaches to economics, but with an empirical rigour that gained him the wide respect of the economics profession.

Born in Scunthorpe in 1936, the son of a train driver, Keith was a triallist in his teens at Scunthorpe United. From Scunthorpe Grammar School, he started studying Agricultural Sciences at Wye College, a branch of the University of London, but there his interests moved away from agricultural science to agricultural economics.

After completing a doctorate in agricultural economics at the University of Illinois in Chicago, Keith began his academic career in 1961 at the University of Manchester. He quickly progressed, and was promoted to Senior lecturer only four years later. It was at Manchester where Keith met his future wife Barbara, who worked as a research assistant. In those days, econometric models were estimated using the University’s mainframe computer, and researchers would bring their data cards to be keyed into the machine, often collecting the results the following day. It was during these regular visits that their relationship blossomed. In 1966, Keith moved to the new University of Warwick and it was here that he switched his research interests towards the developing field of industrial economics. In 1970 he was appointed the Clarkson Chair in Industrial Economics in the newly formed economics department, at the youthful age of 33.

In the early 1970s, economics at Warwick was vibrant, although the department was some way from being one of the world’s leading faculties (which it proudly is today). Keith played a significant early role in this transformation. First, as Head of Department (1975-1978), he was instrumental in persuading the University to invest in new Professorships and to making some astute star appointments, which sowed the seeds of the department's development. Secondly, his own research career was also flourishing, with notable seminal papers on Price-Cost Margins and Market Structure (co-written with his PhD student, Michael Waterson) in 1976, and in 1978, a paper (with Dennis Mueller) estimating the high social costs of market power in the US and the UK, argued as largely a result of ‘wasteful’ advertising expenditure by corporate firms trying to stifle competition and maximise profits at the expense of consumers. Indeed, the wider impact of advertising was a long term interest for Keith, and — in what he always regarded as his favourite paper — with John Brack, he empirically demonstrated how ‘excessive’' advertising tended to distort work-leisure choices in the US, with workers undertaking longer hours so as to satisfy a desire for higher levels of materialism. Outside Warwick, Keith was an early President of the European Association for Research in Industrial Economics (EARIE) and founding editor of the International Journal of Industrial Organization. Such was his growing reputation, that he reluctantly turned down an opportunity to take up (future Nobel Laureate) Oliver Williamson’s vacant Chair at Yale.

At this time, Keith began to take a stronger interest in the relationship between a country’s industrial structure and its macro-economic dynamics. He was particularly influenced by Baran and Sweezy’s Monopoly Capital (1966) leading to his own Monopoly Capitalism (1982), where he demonstrated that both rising industrial concentration and industry profit margins were likely to have adverse distributional consequences, reducing effective demand and leading to recession. With another PhD student, Roger Sugden, this analysis was extended to the global economy, where the activities of transnational corporations were considered as exacerbating the problem, often re-locating (or threatening to relocate) production off-shore, leading to de-industrialisation and undermining local development. In his framework, understanding economic governance processes was critical in achieving outcomes in the wider public interest. Keith was thus keen to explore alternative possibilities for industrial development. Along with Roger (Sugden) and others, in the mid-1990's he founded the European Union Network for Industrial Policy (EUNIP). In this regard, Keith saw the potential in so-called ‘non-hierarchical’ and more co-operative modes of production, specifically in regional clusters or industrial districts of independent small and medium sized firms, such as in the successful Emilia Romagna region of Northern Italy.

As a person, Keith was charismatic and forceful. As an academic, he was always engaging and open to new ideas, always listening and offering instead his careful thoughtful perspective. Because of this, he was able to work productively with a wide variety of people over many years, and in some cases, with others who may have held different views. He was also an inspirational teacher and an extremely supportive PhD supervisor, where he gave students’ work the utmost scrutiny, offering criticism and praise in appropriate measure. Many of his former PhD students have gone on to have highly successful careers as either academic and/or professional economists in their own right. Despite retiring in 2003, Keith continued to conduct research, recently co-editing a book (with David Bailey and Phil Tomlinson) exploring new possibilities for UK industrial policy. He went into the Department at Warwick most days until late last year.

Although Keith was not keen on working within the established order, he nevertheless sought a significant role in University governance, in the development of Coventry following its deindustrialisation, and in national politics through his role in an informal ‘think tank’ set up by John Smith, then Labour Leader of the Opposition, together with closet Labour supporters in industry. Thus Keith was held in high regard by so many people, not only in economics, but also across academia and in policy circles. Outside academia, he was a keen Coventry City football supporter, and enjoyed walking as a pastime. He leaves behind his wife Barbara, son Marc (Professor of Entrepreneurship at Brighton), and daughters Lee and Lucy.

Phil Tomlinson
University of Bath